World leaders in crisis talks and central banks poised to act as fears over Greek election leave euro teetering on brink

David Cameron held crisis talks with eurozone leaders last night amid mounting speculation that the world’s central banks are poised to launch a massive financial intervention after Sunday’s Greek elections.

The Prime Minister used a video conference call with the leaders of France, Germany, Italy, Spain and the EU to draw up a co-ordinated response to the potentially disastrous fallout from the poll.

Mr Cameron is due to travel to Mexico for the G20 Summit tomorrow night just hours after voting closes in Greece, where the Left-wing anti-austerity party Syriza is expected to do well.

A better future? Supporters of the 'New Democracy' political party light flares during a rally

Hoping: Supporters of the 'New Democracy' political party attend a rally ahead of Sunday's general election that could determine the future of the Euro

The party has pledged to tear up the austerity deal imposed as part of the latest international bailout.

Greek conservative leader Antonis Samaras said last night that ‘the first choice the Greek people must make is euro versus drachma’.

In his final election rally speech in Athens, the New Democracy leader, who backs the country’s bailout, said: ‘We are going into an election to decide the future of Greece and of our children.’

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Without cash from Europe and the International Monetary Fund, Greece will go bust within months.Chancellor George Osborne warned last night that the eurozone was ‘approaching a moment of truth’ and a chaotic Greek exit would send shockwaves through the global economy.

The Bank of England has already outlined plans to flood the British banking system with at least £5billion of cheap loans in the first of many monthly auctions on Wednesday to boost the economy. In total, £140billion is set to be pumped into the banks over the next 12 months.

Popular: New Democracy party leader, Antonis Samaras as Greece heads for a momentous electoral battle that could decide whether it stays in the eurozone

Adulation: Samaras' supporters cheer him as he milks the applause on the stage (Samaras pictured bottom right)

Officials from the G20 nations said other central banks, including the European Central Bank, were also ready to act if required.

‘The central banks are preparing for coordinated action,’ said a senior G20 aide.

Following the video call last night, a Downing Street spokesman said: ‘Leaders agreed the need for countries to continue to take the necessary action to secure global economic stability and to support growth.’ Mario Draghi, the head of the ECB, pledged to support the European banking system if the result of the Greek election unleashed a fresh wave of turmoil.

He said: ‘This is what we have done throughout the crisis and this is what we will continue to do. ‘There are serious downside risks here. The risk has to do mostly with the heightened uncertainty.’

World leaders are expected to pile pressure on German Chancellor Angela Merkel to use the country’s economic might to prop up the euro. But Mrs Merkel has warned Europe faces a ‘Herculean’ task, which Germany cannot undertake alone.

Germany has also warned it will not be ‘blackmailed’ by the situation in Greece.

France and Italy need bailouts too

Heating up: Things are tense in Greece, as the people could vote for a return to the Drachma

Last night it emerged that French president Francois Hollande and Italian prime minister Mario Monti have delayed their travel to Mexico in order to deal with the fallout from Greece.

Mr Cameron and Mr Osborne will be in the air when the stock market opens in London on Monday.It is understood their flight will be fitted with special communications equipment to allow them to respond to any immediate crisis.

It comes after fears of a prolonged recession intensified yesterday as a ‘disastrous’ fall in exports plunged the UK economy deeper into crisis.

Figures from the Office for National Statistics showed sales of British-made goods overseas sank an eye-watering 8.6 per cent in April as demand faltered around the world, leaving the biggest trade deficit in nearly seven years.

Exports to the European Union – Britain’s biggest market – fell 6.8 per cent. It raised fears that Britain would not emerge from recession until the autumn of this year or even 2013.

Anxiety about Greece is focused on the strong showing by Syriza. But there is also intense concern about the situation in Spain, where last week’s £80billion bailout of the banks has failed to stem the crisis. In a blunt warning to Germany, Spain’s foreign minister Jose Manuel Garcia-Margallo suggested the collapse of the euro could be imminent.

‘If the Titanic sinks, it takes everyone with it, even those travelling in first class,’ he said.

‘The future of the European Union will be played out in the next few days, perhaps in the coming hours.’

New Democracy: The party's supporters wait for a speech from its leader, Antonis Samaras, during a pre-election campaign rally

Biggest drop in our incomes

The International Monetary Fund last night said Spain would miss its budget targets for the year.Madrid planned to cut the deficit from 8.9 per cent of GDP last year to 5.3 per cent this year, but analysts think it will come in closer to 6 per cent.

And in a sign that the crisis is still spreading, international ratings agency Moody’s has slashed the credit score of five Dutch banks.

The agency downgraded ING, Rabobank, ABN Amro and car-related group LeasePlan by two notches, while lowering the rating of SNS Bank by one.

Moody’s predicted the Dutch economy would shrink by 0.6 per cent in 2012.

‘We must do everything possible to prevent the eurozone from falling apart,’ said Dutch prime minister Mark Rutte.

Nancy Curtin, chief investment officer of investment firm Close Brothers Asset Management, said Europe needed to face up to the reality that the currency union could not work without fiscal union.She said: ‘Only two outcomes are likely – a move towards some sort of a fiscal union or a breakup. ‘The good news is that the crisis endgame has begun. The eurozone cannot muddle through for long.’